USD/NOK declines to lows in over a month after US CPI


  • The USD/NOK declined to 10.887, seeing 1.70% losses.
  • Soft inflation figures from the US fueled risk on flows.
  • Markets are betting on a more dovish Federal Reserve.
  • The US will report Retail Sales and PPI figures on Wednesday.

The USD/NOK faced severe selling pressure on Tuesday, reaching 10.880 and seeing 1.70% losses. A weak US Dollar mainly drove the pair after the report of October inflation figures from the US, which came in softer than expected.

According to the official report of the US Bureau of Labor Statistics, the monthly Consumer Price Index (CPI) remained unchanged while experiencing a year-on-year increase of 3.2%. The Core measure was registered at 4% YoY, slightly lower than the prior 4.1%. After the report of soft Nonfarm Payrolls in early November, these figures reduced the likelihood of another interest rate increase by the Federal Reserve (Fed), immediately prompting a risk-on sentiment in financial markets.

The question is now how long the Fed will maintain rates at restrictive levels, and in the meantime, markets are betting on rate cuts in May 2024. On Wednesday, the US will report the Producer  Price Index (PPI) and Retail Sales figures from October, which will likely give further clues on the Fed's plans.

USD/NOK levels to watch

Based on the daily chart, the USD/NOK has a bearish technical outlook as indicators are flashing signs of sellers gaining ground after pushing the pair down by more than 3% since last Friday. The Relative Strength Index (RSI) displays a negative slope in the bearish region, while the Moving Average Convergence (MACD) histogram shows rising red bars. 

Evaluating the broader scale technical outlook, the pair is also below the 20 and 200-day Simple Moving Averages (SMAs), but above the 100-day SMA, indicating that the bulls are still holding some dominance over the bears on the broader time horizon despite the sellers being in command in the short term.

Supports: 10.881, 10.850, 10.775.
Resistances: 11.000, 11.030, 11.119 (20-day SMA).


USD/NOK daily chart

 

USD/NOK

Overview
Today last price 10.8889
Today Daily Change -0.1925
Today Daily Change % -1.74
Today daily open 11.0814
 
Trends
Daily SMA20 11.1237
Daily SMA50 10.931
Daily SMA100 10.6733
Daily SMA200 10.6345
 
Levels
Previous Daily High 11.1473
Previous Daily Low 11.0596
Previous Weekly High 11.2465
Previous Weekly Low 10.9982
Previous Monthly High 11.277
Previous Monthly Low 10.6561
Daily Fibonacci 38.2% 11.0931
Daily Fibonacci 61.8% 11.1138
Daily Pivot Point S1 11.0449
Daily Pivot Point S2 11.0084
Daily Pivot Point S3 10.9572
Daily Pivot Point R1 11.1325
Daily Pivot Point R2 11.1837
Daily Pivot Point R3 11.2202

 

 

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